Dispute Resolution · Costs — Part 36 offers
A claimant company sued a defendant supplier for £80,000 for breach of contract. A defence has been filed; no counterclaim has been intimated. The claimant's solicitor emails the defendant's solicitor a written offer headed "Without prejudice save as to costs", stating it is made under Part 36, relates to the whole claim, and offers to accept £55,000 in full and final settlement. The closing paragraph states: "This offer is open for acceptance within 14 days of the date of this letter, after which it will be withdrawn." The defendant does not respond. Eight months later, the claimant obtains judgment at trial for £62,000 and now seeks the indemnity costs, enhanced interest and additional amount available where a claimant betters its own offer.
What should the solicitor advise is the most likely reason the claimant cannot obtain the enhanced Part 36 consequences?
- The offer did not state on its face that it carried Part 36's consequences.
- The offer was capable of withdrawal after its specified period expired.
- The offer was made fewer than 21 days before trial commenced.
- Marked 'without prejudice save as to costs', it could not also be a Part 36 offer.
- The offer did not allow a period of at least 21 days for acceptance.✓ Correct
Reveal the answer and the full analysis
Correct answer — E. The offer did not allow a period of at least 21 days for acceptance.
A Part 36 offer must specify a relevant period of not less than 21 days within which the defendant will be liable for the claimant's costs if it accepts (r 36.5(1)(c)). This offer gave 14 days, so it fails a mandatory form requirement — and r 36.1(2) is blunt: an offer that does not comply with r 36.5 does not carry Part 36's consequences. The claimant beat its own offer at trial, but the enhanced package under r 36.17(4) — indemnity costs, enhanced interest and the additional amount — attaches only to a valid Part 36 offer. All that remains is the court's general costs discretion (r 44.2). The courts apply Part 36 as a self-contained, prescriptive code, by its terms (Gibbon v Manchester City Council).
Why the other options fail
- The offer expressly states it is made under Part 36 — that satisfies r 36.5(1)(b). The defect lies elsewhere.
- A Part 36 offer may validly be withdrawn by written notice once the relevant period expires — an ordinary feature of the regime, not a flaw.
- The offer was made roughly eight months before trial — nowhere near the 21-days-before-trial rule this option gestures at. Right rule family, wrong fact.
- 'Without prejudice save as to costs' is exactly how Part 36 offers operate (r 36.16) — that marking is consistent with a valid offer.
The trap this question sets
Everything about this offer looks compliant: it says it is made under Part 36, it covers the whole claim, and the without-prejudice heading is standard. The bet is that you will read the 14-day acceptance window as a harmless commercial choice. It is not — Part 36 is prescriptive, r 36.5(1)(c) demands at least 21 days, and one defective mandatory element means the offer simply is not a Part 36 offer, however handsomely the claimant beat it at trial. And notice the decoys: two other options also talk about timing, so you cannot find the answer by hunting for the only option that mentions a period. You have to know the rule.
Authority — CPR r 36.5(1)(c), read with r 36.1(2) and r 36.17(4)
